How Food Security Bill in its current form creates more problems than it solves

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No right thinking and compassionate Indian can argue against Food Security to millions of Indian poor who suffer hunger worse than Sub-Saharan Africa. But instead of fixing structural issues, how worthwhile is it to do more of the same things which have failed us over the last 60 years? Before knee-jerking into the lakhs of crores of public money into the Food Security Bill, have we understood how is it going to affect farmers, rural incomes and and the intended beneficiaries?

Let me not even take the fiscal argument as I believe money should not be a constraint for a cause like this but let us look at how various stakeholders are going to be affected by this.

a) Not getting market price for their yield
b) Not getting advance price signals from market to know what to grow for a rewarding remuneration
c) Not being able to freely decide who to sell the produce. This also obscures the crop choices for the farmers. Why do you think too many of them grow only wheat and rice and not pulses or lentils?

With FSB, all the above hardships would get further accentuated as the government would almost entirely monopolize procurement of agricultural produce. FCI’s procurement needs would massively increase after the Food Security Bill and the Central Govt would decide what price to pay, what to grow and who to sell to.

Second, let’s look at the execution model that the FSB proposes to use,

We all know that the current system of food supply chain run by Food Corporation of India and National Warehousing Corporation wastes more than 35% of food-grain. We also know that the current PDS system of targeting BPL cards leave many eligible poor out while allowing many undeserving ones to benefit. FSB proposes to use the same system.

“If implementing the bill is to cost Rs 6 lakh crore over a three-year period, as the Commission for Agricultural Costs and Prices (CACP) reckons, that’s a huge Rs 3 lakh crore to be siphoned off by various middlemen along the way.”

Third, let us look as what will Food Security Bill will do to the Food availability in the country,

FSB will dramatically increase the Govt procurement of food-grain from the market, crowding out private procurement. A third of it will get rotten and inedible in Govt godowns. Of what would be left, target beneficiaries can hope to get only half of it, rest being pilfered to open market. This will create an artificial scarcity and a runaway food inflation in India. A scary scenario indeed!

So in summary, Food Security Bill in its current form will distress farmers and rural incomes, cause food scarcity and runaway inflation without much benefiting the hungry, and while creating a fiscal hole in country’s finances.

Having made the case against the Food Security Bill in its current form, let me also give some pointers about what should be done to fight hunger in India:

1. Gujarat has shown the way on how by working on irrigation, rural Infra (including power), crop diversification (including fruits and veggies) animal husbandry and allied activities, farm productivity can be transformed. Not only that, this also resulted in growth in rural income, a prerequisite for comprehensive food security.

2. Strengthen or add physical and IT Infrastructure to FCI, Nation warehousing Corporation and the entire Food-Supply-Chain.

3. Focus on overall malnutrition, not just calories are carbohydrates. Current focus is entirely on grains, while neglecting fruits, vegetables, milk and eggs. Govt must promote the diversification of food

4. Above all, we need a comprehensive approach of poverty alleviation, which along with food scarcity and food inflation is the basic cause of hunger and malnutrition.